Property in Shanghai Increased

Property in Shanghai Increased

Shanghai will increase land supply for the development of new residential properties in the next five years, according to the city’s 13th five-year plan for land use (2016-20) released on Friday.

The city will allocate a specific amount of land for rental homes as well, in a bid to increase the efficiency of land use and make housing more affordable and accessible to denizens.

About 5,500 hectares, or 55 square kilometers, will be used for residential property development, up 20 percent from the previous plan (2011-15).

More homes among the new supplies will be smaller in size — compact apartments instead of spacious luxury condominiums or villas.

About 1.7 million apartments will be part of the new housing supply, about 60 percent more than that in the 2011-15 period.

Mao Wenyuan, property sales manager with Shanghai Wendi Property, said: “From the planned land use and planned numbers of new supplies in residential properties and rental residential apartments, we can say that a high percentage of new supplies will be small apartments which are more affordable.

“The latest plan eyes improvement in living conditions for the mass segment instead of a few rich sections of society. In the future, apartments smaller than 70 square meters, with one bedroom, or en-suite studios are likely to dominate the new supplies.” James Macdonald, head of Savills China Research, said the new plan’s impact on the property market will not be felt soon as it takes time for its implementation. But the very idea behind the plan is to meet the market demand amid demographic changes.

“More mobile population, singles and young couples will require properties with more density and affordability. This tends to be the natural progression of city development of international cities such as Shanghai, Hong Kong and London,” he said.

〈Asian Post, July 9, 2017〉Mainland Chinese investors spent a record US$101.4 billion on international real estate last year, according to a report by Juwai.com, a property website.

It also put the es timate for this year at about US$80 billion, which, though lower than 2016, still ranks among the top three in the history of the study.

The estimate by Juwai.com of the aggregate property investment, which is based on data from the industry and the governments, includes purchases by corporate and retail investors.

“2016 marked the first time in history mainland Chinese buyers acquired more than US$100 billion worth of international real estate,” said Sue Jong, chief of operations at Juwai.com. “The 2016 total represented an increase of more than 25 per cent over 2015 and an 845 per cent surge over five years.”

Jong said the United States was a near-perfect market for mainland Chinese buyers. “It received more than US$50 billion, the greatest share of the real estate investment made by mainland Chinese last year,” she added.

Experts from the North American property industry particularly welcomed the new statistics. “There is no denying the impact mainland Chinese buyers are having on the North American real estate market,” said Anthony Hitt, chief executive of Engel & Volkers North America. Hitt said his firm’s advisers in Vancouver, Manhattan and Los Angeles were seeing a strong influence from mainland Chinese buyers.

Hong Kong came third in the markets for mainland investment by value, behind the US and Australia, the study by Juwai.com found.

China has been implementing measures to restrict outbound investments in the face of accelerating capital outflows. But headline-grabbing cross-border deals have continued regardless.

“Current trends suggest that Chinese property investment this year will be on a par with the levels of 2015, at about US$80 billion. That would make 2017 one of the top two or three years in history,” Jong said. “While levels are lower than in 2016, they will still be extremely high by any standard.”Current trends suggest that Chinese property investment this year will be on a par with the levels of 2015, at about US$80 billion Sue Jong, chief of operations, Juwai.com One driver of mainland Chinese investment is that despite the country’s torrid pace of overseas acquisitions in recent years, it remains underinvested globally compared with other economies.

〈Taiwan Post, July 8, 2017〉Last year saw an above-average rise in high net worth individuals, but their risk-averse investment style is challenged by a drop in upscale housing prices

The nation had 5 percent more ultra-high net worth individuals last year, outpacing the world’s 4 percent increase, although they tend to be more conservative in their investment strategy, an annual survey by London-based property consultancy Knight Frank showed yesterday.

The number of Taiwanese with a net worth of more than US$30 million rose to 1,676 last year thanks to an improving global economy, with 84 percent of them living in Taipei, Taipei-based associate research director Andy Huang (黃舒衛) told a news conference.

That put Taiwan in 23rd place in global rankings behind Hong Kong, China, Japan and South Korea in the region, the survey found, while the US retains the status of richest nation.

Super-rich Taiwanese on average own four properties for self-occupancy, rivalled only by their peers in Saudi Arabia at 4.3 and on par with those in Malaysia, the report said.

Properties for self-occupancy account for 16 percent of affluent Taiwanese people’s overall assets, a further 23 percent of which consist of real-estate investments, Huang said.

Financial assets and stakes in businesses make up for 25 percent and 21 percent of their wealth respectively, he said.

Taiwanese also display a keen interest in assorted collections, which constitute 9 percent of their portfolio, higher than the 5 percent average in Asia and 6 percent globally.

“The findings are consistent with a conservative investment approach, as wealth preservation sits atop the concern list of super-rich Taiwanese, followed by inheritance arrangements and taxation planning,” Huang said.

While wealth preservation also carries heavy weight with the global rich, they assign equal importance to capital augmentation, portfolio diversification and innovative investment, the report said.

A relatively conservative strategy allows ultra-rich Taiwanese to be less worried about political uncertainty or asset value volatility compared with their global peers, it said. Instead, potential tax increase and capital controls constitute their biggest worry, it added.

In terms of real-estate investment, commercial properties are expected to be the top investment target among Taiwanese and foreign super-rich in the next two years, followed by overseas residential properties and domestic residential properties, the report said.

〈Asian Post, July 7, 2017〉The inside word going around Hong Kong’s property circles is that retail space in Central is available to any global retailer for the taking, as existing tenants will be happy to move out to cheaper locales to survive the city’s retail slump.

Property consultants said an influx of global brands bidding up retail rents by taking up large spaces for their flagship stores in 2013 now found themselves in trouble, as dwindling footfall and weakened spending for luxury goods keep continuing to plague the sector.

Helen Mak, senior director and head of retail services at Knight Frank, said the current situation presents a bright opportunity for retailers to expand as landlords are willing to reduce rents. “There is a black joke circulating in the industry. International brands can have shops anywhere they want in Central as existing tenants will be happy to give up their spaces at any time,” Mak said.

For the past three years, Hong Kong’s retail market has been hard hit by the fall in tourist arrivals from the mainland and the depreciation of the yuan.

Retail spending for jewellery, watches, and other valuable goods plunged 30 per cent to HK$29.7 billion in the first half of this year, from HK$52 billion during the same period in 2013.

Retailers in the city are often seeking a 50 per cent rent reduction in order to justify lower sales projections amid weakening spending for luxury goods, she said.International brands can have shops anywhere they want in Central as existing tenants will be happy to give up their spaces at any timeHelen Mak, senior director and head of retail services Knight Frank “Although landlords are willing to offer more room for negotiation, major brands still need to secure approval from their headquarters, which is getting tougher [due to] cost controls.

〈Asian Post, July 4, 2017〉Stricter capital controls introduced by Beijing last November have cut investment demand by mainland investors in Hong Kong by four times, according to real estate management company Jones Lang LaSalle.

Mainland investors accounted for only 7.6 per cent of the total investment volume in Hong Kong’s office sector in the first half of the year, compared to 31 per cent in 2016, said Denis Ma, head of research at JLL.

The total number of commercial property transactions valued at over HK$100 million surged by 51 per cent year on year in the first half, but total investment volume was down 12.7 per cent year on year. The office sector continued to attract the most investment, accounting for 53 per cent of total commercial investment volume while retail and industrial accounted for 25 per cent and 22 per cent, respectively.

“We continue to see strong investor interest in the commercial property market despite yields remaining at very tight levels,” said Ma.

“The office sector continues to draw considerable interest from investors with most focusing on the tight vacancy environment in the city’s core area markets. We expect this to continue, especially as pre-leasing in upcoming new supply gathers pace and vacancy pressure diminishes.” The office sector recorded the strongest performance within the commercial and retail sector. Prices for Grade A offices grew 15.1 per cent in the first half, according to JLL.

The office market in Central saw capital values surge after the sale of the Murray Road car park site for a record average value of HK$50,056 per sq ft.

Capital values of high street shops, however, continued to decline and were down by 7 per cent during the first six months of this year.